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Daily Market Update March 12, 2021

Early Morning Update

The Apr21 natural gas contract is trading down $0.01 at $2.65. The Apr21 crude oil contract is down $0.15 at $65.87.

Summary

Yesterday the EIA announced a 52Bcf withdrawal coming in 8Bcf below expectations. The lower than expected withdrawal yesterday still kept the prompt price in the $2.60-2.70/MMBtu trading range. Leading up to yesterday morning, concern over the accuracy of market forecasting was prevalent since last week saw a 36Bcf difference between forecasted and actual withdrawals. This concern over storage changes contributed to the tight trading range for the NYMEX natural gas prompt month of April. Looking forward, temperatures are expected to stay normal or warm in every region except CAISO until the end of the month. This more temperate weather across the US is going to contribute to the bearish outlook on NYMEX natural gas pricing, but market analysts are concerned over how much further we can go down. Market bulls consider that our current storage is at a deficit from the 5-year average while also considering that legislative changes from the Biden administration could slow production during the upcoming injection season. Overall, the market has fundamental factors pushing both ways, and use of natural gas for electric generation is locking the trends together in many markets.

 

Market Update 03 12 2021

Market Settles 03 11 2021

 

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